Disclaimer: Recorded November 19, 2025

FAQ: What’s driving today’s European gas market?

Chief Analyst highlights why gas prices remain calm despite lower inventories, how Ukraine is reshaping supply dynamics, and what this means for client hedging. Here are the essentials – in a quick FAQ.

1. Why does the gas market appear so calm right now?

The gas market is currently trading in a narrow range around €31/MWh for TTF. Prices have been trending lower for some time, and despite inventories being slightly on the low side – particularly in Germany – the market remains steady. A key reason is the strong inflow of U.S. LNG to Europe, combined with reduced LNG demand from Asia, especially China. As a result, the overall balance still appears comfortable for now.

2. Why is the market still relaxed even though inventories are lower than usual?

The large inflow of LNG is keeping the market calm, even though EU inventories are nearly 20% below last year’s levels and German storage is even lower. Winter temperatures are falling, which means withdrawal season has begun, and gas and coal use in the power mix is rising, especially after a brief period of low wind and solar generation. Despite net withdrawals already taking place, the market remains surprisingly complacent about the tighter storage situation.

3. How does the situation in Ukraine affect the gas market?

For the first time, no Russian gas is transiting through Ukraine to the EU, as flows stopped completely on January 1. Ukraine now needs to purchase gas from the EU at a time when Russian attacks have taken 50–60% of Ukrainian gas production offline. This creates a new, untested supply dynamic, and there is concern that the market may be underestimating the potential impact of this shift.

4. How should clients think about hedging in this environment?

For the coming quarters (Q1 and Q2), it makes sense for consumers to maintain a high hedge ratio, as the market appears overly relaxed despite clear winter risks. For the second half of next year, a more cautious approach is appropriate, as significantly more U.S. LNG is expected to arrive, which could add downward pressure on prices further out the curve. Producers should also be mindful of this downward pressure on long-term prices, particularly on Calendar ’26 and ’27, and acknowledge that a potential peace agreement could push long-end prices even lower. Over the next six months, producers with low benchmarks may prefer to wait for a price pickup before locking in production, as winter dynamics may offer supportive price levels.